The US dollar is down 0.2% this morning against the Canadian dollar. Since the beginning of the week, the US dollar has slowly but surely lost about 0.8% of its value and now stands very near its lows for 2021 and not far from its lowest levels since March of 2018. Certainly, part of it has to do with the gloomy picture that Fed Chairman Powell painted of the US employment picture yesterday and his comment that monetary policy would need to remain “patiently accommodative” to address the issue. But it is also the case that the Canadian dollar is catching up a bit after underperforming in an environment of rising equity and oil prices. For example, oil, which is traditionally a major factor in the USD/CAD exchange rate is up roughly 20% since the beginning of the year while the Canadian dollar is up only about 1% (even after this week’s move). Still, none of the moves in USD to CAD are particularly large so far and volatility is actually below normal. While the USD has been weak so far this week, it is hard to say that we are seeing a trend one way or another.
